Moody's Rates Ripple's RLUSD A2/P-1, Cites GENIUS Act for Upgrade Path

Moody's Ratings assigned Ripple USD (RLUSD) an A2 long-term and a P-1 short-term deposit rating, announced Oct. 27–28. The rating covers only RLUSD issued by Standard Custody & Trust Company (SCTC). Moody's said GENIUS Act protections taking effect in 2027 could support an upgrade.

What was rated

Both marks are investment grade, and P-1 is Moody's highest short-term grade, according to The Block. Moody's own rating notice was not reviewed for this report, so the wording is taken from press reports. Moody's used its Stablecoin methodology, published in March 2026, and aligned the short-term grade with the long-term one. A2 sits five notches below Moody's top Aaa grade (TradingView/99Bitcoins).

The rating applies only to RLUSD issued natively on the XRP Ledger and Ethereum by SCTC, a wholly owned Ripple Labs subsidiary. It is not a rating of Ripple Labs. RLUSD launched in December 2024 after approval from New York regulators.

What backs the grade

Moody's said the reserve is predominantly invested in highly liquid, short-duration U.S. government assets and cash, and that SCTC targets 103% reserve coverage, which exceeds the minimum coverage level associated with the rating (The Block).

Most reserve assets sit with BNY, which Moody's rates Aa1(cr), per Unchained. Up to $50 million in cash can be held at another bank. SCTC keeps an equal amount of short-term T-bills in a separate BNY account against it.

What holds it back

Moody's named two weak spots: SCTC is not a bankruptcy-remote vehicle, and holders today have no direct ownership stake in the reserve. It said segregated accounts titled for holders and NYDFS supervision offset this.

Only qualifying institutions onboarded by SCTC can redeem directly, at par on a T+2 basis. An SCTC bankruptcy and the resulting automatic stay could stretch that timeline.

The GENIUS Act was enacted July 18, 2025, and takes effect Jan. 18, 2027. Moody's said the GENIUS Act will add statutory protections once in effect in 2027, including keeping required reserves out of an issuer's bankruptcy estate. Arrangements giving holders a priority interest in the reserve could support an upgrade. Downgrade triggers include weaker reserves, a lower-rated custodian or control failures (Unchained).

The OCC issued its final implementing rule on Oct. 21, 2026, also effective Jan. 18, 2027. As of the rule's release, the OCC had not begun accepting applications or waiver requests. Existing issuers can get a waiver of at most 12 months from Jan. 18, 2027.

Ripple's "first" claim

Jack McDonald, Ripple's senior vice president of stablecoins, said in an X post, as reported by Unchained, that RLUSD is "the first stablecoin to have ever received an investment-grade" rating from Moody's. Crypto Times notes this is Ripple's own characterization. Moody's did not make that claim in the material reviewed, and we have not independently verified it.

Crypto.news notes S&P has assessed USDC and USDT, but S&P's stablecoin scores differ from Moody's deposit ratings. Crypto.news said no public announcement it examined establishes that Circle or Tether has applied for a rating under Moody's new methodology.

A credit rating is an opinion on credit risk. It does not guarantee redemption, the $1 peg or the absence of holder losses. It is not regulatory approval or a bank deposit.

Market context

As of Oct. 28, 2026, RLUSD has a market cap of about $2.58 billion and trades near $1.00, per CoinGecko data. That is roughly 0.85% of the $302.33 billion total stablecoin supply (DefiLlama, Oct. 28, 2026). USDT accounts for $181.16 billion and USDC for $71.25 billion.

What to watch

The OCC says its application and waiver process opens only after OMB approves the application information requirements (OCC Bulletin 2026-50; Yahoo Finance).

Sources

• Unchained: Moody's assigns A2 deposit rating to Ripple's RLUSD
• The Block: Moody's rates Ripple's RLUSD
• Crypto Times: Moody's assigns Ripple's RLUSD investment-grade rating
• crypto.news: Moody's Ripple RLUSD A2/P-1
• TradingView News / 99Bitcoins
• OCC Bulletin 2026-50
• Yahoo Finance: OCC GENIUS Act rules
• DefiLlama Stablecoins
• CoinGecko: RLUSD market data